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Plan Relief Cuts

Morgenthau Speech Forecasts Congress Attacks on Workers

(November 1937)

From Socialist Appeal, Vol. 1 No. 15, 20 November 1937, pp. 1 & 7.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A brazen attempt to save the profits of Big Business by reducing its taxes and cutting down the already meagre relief program is being made by the Roosevelt administration at the special session of Congress that began this week.

Roosevelt admitted in his message to Congress that he was alarmed by the current business recession with its accompanying tremendous lay-offs which reflect the deepening of the basic crisis of capitalism.

The “New Deal” program to meet this crisis was outlined by Secretary of the Treasury Henry Morganthau Jr. in his authoritative speech to the Academy of Political Science a few days prior to the opening of Congress.

“A determined movement towards balancing the budget is one of the needed solutions for today’s problems,” Morgenthau told Wall Street, “to foster the full application of the driving force of private capital.”

Cries: Reduce Relief!

The Roosevelt regime hopes to balance the budget through, “reducing relief, farm and public works expenditures,” Morgenthau declared, “and would try to encourage expansion of private industry through revising taxes found to be inequitable.”

This declaration met with the unanimous approval of the American capitalist newspapers. Especially such reactionary papers as the New York Herald Tribune. Why?

Because Big Business has been given a public assurance that the Roosevelt administration will help them maintain profits. Can the capitalists be blamed for cheering?

But what about the workers?

And the unemployed ? What has the Roosevelt regime to offer them ? What does it propose to do about the hundreds of thousands of lay-offs? About the already drastic cuts in relief that have brought misery and starvation?

Every worker who cast his ballot last fall for the re-election of Roosevelt believed that the “great humanitarian and champion of the common people,” would do something to alleviate the burdens of the worker’s lot under capitalism.

In plain, clear, and cold-blooded terms that only the blind could fail to see and understand, Roosevelt informed the workers, through his spokesman Morgenthau, that, “It is necessary to reduce the budget by $700,000,” which can be done, he adds, “through reducing relief, farm and public works expenditures.” Was any betrayal ever announced so frankly and openly? Roosevelt admits that hundreds of thousands have been laid off. That there are millions unemployed. He points that out in his message.

“Aid Business,” Keynote

Yet Roosevelt proposes to cut down on the amount of relief in the face of a great increase in the need for relief! “Let them starve,” Roosevelt should have declared frankly. He meant that. His program, if carried out, will bring that.

“Aid Business,” is the key-note of the Roosevelt message to Congress. This, at a time when financial reports indicate that the rubber, auto, steel, oil and other industries are making over 50% more profit this year than in 1936.

“Aid Business,” shouts Roosevelt (to the cheers of Wall St.) while millions of workers face the cold of winter, the misery of starvation, and the other tragedies of unemployment, without even the prospect of a few bread crumbs in the form of relief!

Real Program: Save Capitalism

How does the present Roosevelt program differ one iota from that advocated by the “great engineer” Herbert Hoover, late unlamented Republican president of the United States, when he was confronted by the 1929 depression?

Such a strong defender of Roosevelt as the New York Post compares the Roosevelt and Hoover policies as essentially the same!

The revolutionary socialists go one step further. We point out that the programs of all the presidents, Republican, Democratic, are essentially the same. Their purpose is identical, namely to save capitalism.

Many workers have wondered Why Wall Street has insisted that Roosevelt balance the budget. Does not the meaning become clear today? Balance the budget means to cut down relief programs so the taxes can be eliminated which hurt the pocket-books of the rich.

“Our tax revenues come largely from individual earnings and business profits. We do not wish to impose levies which tend to dry up the sources of revenue,” Morgenthau point out. So instead of taxing the rich, the government decides to starve the poor.

More than that, Roosevelt wishes, “to encourage the expansion of business through revising taxes found to be inequitable.” But business considers all taxes they pay as “inequitable.” That’s why Wall Street maintains powerful lobbies in Washington to fight against taxes.

Business “Opposition” Disappears

Is it any wonder the business opposition to the special session of Congress has disappeared? The financiers and industrialists worried that perhaps Roosevelt might do something which would hurt them.

Instead, his message and his program as outlined by Morgenthau, told them, in advance, that the special session would be for the capitalists’ benefit and against the interests of the working people.

Talk of legislation for a 30-hour week died completely many months before this session of Congress began. The 40-hour week, too, is considered impractical by the Roosevelt administration! Even a modified wage wage and hour bill received but vague support in the Roosevelt message!

The industrial rulers of America are thus being given a silent approval of their campaign to lengthen the hours of work in the factories. Every economic gain that the organized Labor movement won by determined struggle in the past two years has been placed in acute jeopardy by the Roosevelt policies.

Why does Roosevelt pursue these policies? Why has he made the slogan, “Aid Business,” the theme of his legislative program?

Roosevelt understands that capitalism is a system based on private property of the means of production from which profit is made through the exploitation of labor.

What “Prosperity” Means

“Prosperity” under capitalism can only mean that private industry is making enough profit to maintain production schedules which give the workers the means of subsistence.

“The basic need today is to foster the full application of the driving force of private capital. We want to see capital go into productive channels of private industry. We want to see private business expanded. We believe that much of the remaining unemployment will disappear as private capital funds are increasingly employed in productive enterprises.” Morgenthau explained the basic motives of the Roosevelt policy. What does it mean? Is it possible?

Certainly the guarantee that taxes will be reduced is an incentive to big business to use capital for private industry. More important, however, is the basic consideration that profit can only be made by exploiting labor, by having long hours, low wages and poor working conditions: By not paying labor its full due.

The Roosevelt program of ignoring the 30-hour week demand, of passing up a wage and hour bill, assures the capitalists of little opposition from the political direction to their attempts to lower wages etc.

The Roosevelt policy of reducing relief has the effect of making labor cheaper too. The bargaining power of the workers is less when millions are unemployed. It is harder to fight the bosses through strikes to maintain or increase wages when millions of unemployed want jobs. Potential scabs are too plentiful.

Workers Must Prepare

In other words, Roosevelt’s program can do only one thing: attempt to save capitalism at the expense of the working people and the masses of unemployed. That’s his encouragement to Big Business.

Even this is impossible, however. The millions of unemployed can’t buy whatever industry produces. Each time that capital spends money in private industry to produce goods, it introduces labor-saving machinery which continues to throw more men out of work permanently.

The home market can’t absorb the goods produced: the foreign markets are tied up by other capitalist nations and a crisis develops, as it has periodically for many decades.

When the crisis can’t be solved by political measures, by allowing millions of working people to starve during what is called a depression: when the workers begin to rebel against the damnable injustices of this vicious capitalist system, the capitalists have two answers.

Either they plunge America into another world war to obtain bigger and more lucrative foreign markets for the goods they produce (which the exploited workers at home can’t buy) or they crush the workers through fascist forces.

Organized Labor can’t and won’t stand for the betrayal of the working people by Roosevelt’s policies. A militant struggle against them must come.

Then, it will be necessary to prepare to keep America out of the next imperialist war, which shall be declared under the guise of “Fighting for Peace and Democracy.”

The workers’ answer to imperialist war and fascism must be the revolutionary overthrow of capitalism, the system of unemployment, misery, starvation, as so strikingly revealed today.

In its struggle against the betrayal policies of Roosevelt, the workers will develop the class-consciousness, the power, and the self-confidence which shall prepare them for the task of overthrowing the capitalist system.

In the vanguard of this struggle, will be found the revolutionary socialists around whose program and banner the fight against capitalism can succeed, as it did 20 years ago in Russia.

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Last updated: 23 November 2014